Question

Answer the question on the basis of the following production possibilities table for two countries, North Cantina and South Cantina.

Refer to the table. If South Cantina is producing at production alternative F, the opportunity cost of the first unit of capital goods will be

A.1/2 of a unit of consumer goods.
B.1 unit of consumer goods.
C.27 units of consumer goods.
D.2 units of consumer goods.

Answer 1

The answer is c
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Answer 2

'Opportunity Cost' is described as the 'value of the next best possible opportunity that is given up for choosing the other.'

In the given situation, the opportunity cost of producing the very first unit of Capital Goods for South Cantina would be:

C). 27 units of consumer goods.

• As we know, 'opportunity cost' is the cost of the next best alternative and its benefits that are lost for producing the other.
• The loss that South Cantina would suffer for producing one unit of the capital good is worth '27 units of consumer goods.'
• This implies that the 27 consumer unit goods would be lost for not choosing it and producing 1 unit of capital goods.

Thus, option C is the correct answer.

Learn more about 'opportunity cost' here:

brainly.com/question/20246233